What are the odds? Rare Las Vegas Strip casino hits the market

The New York investment firm made the once-failing property one of the most successful on the Strip

Apr.April 17, 2019 03:30 PM
Blackstone Group CEO Stephen Schwarzman and the Cosmopolitan of Las Vegas (Credit: Getty Images and Wikipedia)
Blackstone Group CEO Stephen Schwarzman and the Cosmopolitan of Las Vegas (Credit: Getty Images and Wikipedia)

The Cosmopolitan hotel and casino was one of the biggest failures of the Las Vegas Strip in the last decade. Now, five years after buying and reversing its fortunes, Blackstone Group is reportedly exploring a sale.

The New York-based investment giant has retained Deutsche Bank and PJT Partners Inc. to explore options for the property, including a sale, according to the Wall Street Journal. If sold to a casino operator, the property could be earn $4 billion or more. That’s about double the $1.7 billion Blackstone paid for it in 2014.

The 110,000-square-foot hotel with 3,000 rooms sits next to the Bellagio and will likely attract interest from other resort and casino operators, including larger local players or international operators like Malaysia’s Genting Group.

The $330 average daily room rate at the Cosmopolitan is the highest on the Las Vegas Strip and earnings before interest, taxes, depreciation and amortization is around $300 million, sources told the Journal.

Those earnings are more than triple the earnings of the hotel before Blackstone bought the property from Deutsche Bank, which took over the unfinished property after the Bruce Eichner-led development group behind it defaulted on a construction loan.

The property opened in late 2010. Blackstone invested $500 million in the renovations, including converting the four then-unfinished top floors of the hotel into 21 suites meant to attract high rollers. It also built 18 new bars and restaurants at hotel and casino.

Blackstone benefited from strong tourist activity in Las Vegas during its ownership of the hotel, including an all-time peak of 43 million tourist visits to the city in 2016. [WSJ]Dennis Lynch

Related Articles

LA promo

Coming Soon: The Real Deal Los Angeles’ Winter 2020 issue!

The sale of the Ace Hotel was the biggest L.A. County hotel buy in 2019 (Credit: Google Maps)

Here are the biggest LA hotel sales of 2019

From left: Howard Schwimmer and Michael S. Frankel, with 1601 W. Mission Boulevard and 2757 E. Del Amo Boulevard (Credit: Google Maps)

Rexford Industrial adds to LA portfolio with $100M in acquisitions

Andrew McDonald and At Mateo in the Arts District

Cushman’s West Coast chief talks expansion, DTLA market, the death of the starving baby broker & more

3339 Exposition Blvd. and Asher Luzzatto

Luzzatto Co. assembling creative office hub in West Adams

Jason Illoulian and the Cemex plant

Faring makes $30M assemblage play on WeHo/LA border

From left: Nuveen CEO Vijay Advani, Graymark founder/CEO Brian Hecktman

Graymark, Nuveen pay $97M for El Segundo creative office

Twin 44-story Century City Plaza Towers

Hines, JPMorgan asset arm nab $1.2B refi on Century City office twin towers